Medicaid Gets OK for Statewide Managed Care

In a long-awaited move, federal health officials on Friday granted Florida's request to expand its five-county pilot Medicaid managed-care project statewide. Mindful of how some Florida Medicaid HMOs have behaved in the past, the deal includes what an independent analyst called "unprecedented consumer protections."

Credit U.S. Navy

The Agency for Health Care Administration will begin moving Medicaid recipients who are not already enrolled in HMOs and similar networks into such plans, which assume financial risk for their care, early next year, according to the waiver document from the Centers for Medicare and Medicaid Services.

Gov. Rick Scott's press release says 2.9 million Medicaid patients in Florida will be enrolled in managed care plans upon implementation of the statewide expansion. His prepared statement called it "a huge win for Florida families."

Already, 46 percent of Florida's Medicaid beneficiaries are enrolled in managed-care plans, but they tend to be children, who account for the majority of Medicaid recipients and are usually healthy. Those who will be migrating into HMOs and similar networked plans will be those who weren't attracted to them in the first place for one reason or another or those who had little or no choice of plans because of where they lived.

Consumer advocates say they're relieved to see that the waiver included a lot of patient protections, such as a requirement that plans spend at least 85 percent of the premium dollar on health care.

While states have included such limits -- called "medical-loss ratios" -- on Medicaid plans in the past, researcher Joan Alker said in a blog post that it is the first time she has seen the federal government require one. Alker, of Georgetown University's Health Policy Institute, noted that while the Affordable Care Act has medical-loss ratio limits for commercial plans, it exempted other Medicaid plans.

Alker, who has issued numerous studies on Florida Medicaid's managed-care pilot, said the agreement between the state and federal government is "significant for its breadth and depth." It allows virtually every Medicaid patient, including those in long-term care programs, to be folded into private plans.

Alker wrote that while the benefits under Medicaid remain essentially the same, the waiver gives health plans more flexibility to address the needs of individual patients. But that freedom can be either a benefit or a risk to patients.

"With this increased flexibility comes greater oversight responsibilities for the state and federal governments to ensure consumer’s needs are met and taxpayer dollars are used wisely by the managed care plans," Alker wrote.

Florida CHAIN, a consumer group that has been critical of Florida's pilot for Medicaid managed care, said in a press release that its volunteers and staff will keep a sharp eye on the Agency for Health Care Administration and the companies it contracts with.

"The countless reports of disrupted, delayed and denied care streaming in from the original five counties are still very fresh in the minds of all stakeholders," the group said in a press release. It called on AHCA "to put the needs of patients above the interests of companies with a strong financial incentive to limit care."

The fate of Medicaid recipients depends on how well AHCA enforces the standards that will be written into the contracts with private companies, CHAIN noted.

"Medicaid managed care has a horrendous track record in Florida, and the bankruptcy and ongoing fraud investigation of Universal Healthcare provides yet another confirmation that patients and taxpayers remain at risk," CHAIN's release said. "Yet Medicaid HMOs, just like once-praised Universal, will now control access to care for almost all of Florida’s poorest children, pregnant women, seniors and people with disabilities. Patients and their families and advocates will need to be extremely vigilant and vocal as the experiment proceeds.”

The tone was decidedly different in Scott's release. It says: “Florida is leading the nation in improving cost, quality and access in the Medicaid program. CMS’s final approval of our Medicaid managed care waiver is a huge win for Florida families because it will improve the coordination of care throughout the Medicaid system. Healthcare providers can now more effectively manage chronic conditions and work with families to provide preventative treatments."

He said that when the rollout is complete it will be the first time that Medicaid recipients in some counties will have access to coordinated-care plans.

The waiver grants the state permission to expand statewide its five-county pilot project that began in 2006 in Broward, Duval, Clay, Nassau and Baker counties. The pilot required that all Medicaid patients except a few groups be enrolled in a managed-care plan: either a commercial HMO or a Provider-Service Network (PSN), some of which were operated by non-profits.

Evaluations of the results were mixed. A state-paid review of the program by University of Florida's Paul Duncan concluded that the pilot had saved taxpayers money. That was one of its purposes; another was better coordination of care and access to specialists, many of whom have been reluctant to participate in traditional fee-for-service Medicaid because the state's pay rates are low.

A report by the Florida Center for Fiscal and Economic Policy in late 2011 said there had been difficulties with access to care, according to a Health News Florida article at the time. PSNs offered better quality of care than HMOs, that report concluded.